Investing.com — Rosenblatt analysts offer a cautious view on the latest iPhone cycle, citing data from Verizon (NYSE:), AT&T (NYSE:), and T-Mobile’s recent earnings reports. The survey shows that smartphone upgrades are declining across U.S. carriers.
Rosenblatt said the results highlight “subdued and declining smartphone upgrades in the third quarter of 2024” in the U.S. and raise questions about the strength of the AI-driven supercycle.
In Q3 2024, AT&T reported a postpaid phone upgrade rate of 3.5%, down from 3.9% in the year-ago period. Verizon’s upgrade rate decreased from 3.4% to 3.0%, and T-Mobile’s upgrade rate decreased slightly from 2.7% to 2.6%.
Rosenblatt noted that despite the decline, subscriber growth was better than expected, especially for T-Mobile.
While some analysts may have expected demand to rise, Rosenblatt added, “Clearly the supercycle is not here yet. But that’s OK.”
The company expects iPhone sales to increase modestly, at 3% in the September quarter of fiscal 2025 and 4% in three out of four quarters of fiscal 2025. A more robust “supercycle” is expected to begin in fiscal 2027 with the launch of iPhone 17. Driven by advances in Apple’s AI efforts.
A key focus is expected to be the rollout of Apple’s new AI capabilities, starting with iOS 18.1 on October 28 and continuing with iOS 18.2.
They explain that the update introduces new image features such as ChatGPT integration, visual intelligence, and Genmoji, which Rosenblatt believes could help drive demand in the future.
Although early indicators point to a slow start, Rosenblatt remains optimistic about Apple’s prospects.
“Due to faster shipping times early in the release cycle (now approaching iPhone 15 levels), lower shipping times, lower search interest, and lower upgrade rates from U.S. carriers, the data suggests this iPhone cycle is starting to slow. “This shows that there is,” the analyst wrote. , but they expect AI-driven sales growth to materialize over the next year, and the stock price is likely to reflect that optimism up front.
